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Valued Member
Raiders1
Posts: 45
Registered: ‎07-06-2012

Roommate "income"

I'm trying to prepare myself for purchasing a house in the next few months. I've improved my credit scores, and they should improve just a little bit more before I apply. I want to buy a house for around $360K, I know some of you will say buy a cheaper house, but I live in southern california and houses are expensive, so this would be a average 3br 2bath house. I have about $50K for the down payment and make about $48K a year. I have no debt other than about $100 on my two credit cards ($1200 limit total). I know I can afford about $1500 a month by myself.

I currently live with my fiance and a roommate and they help with about $900 per month, if I get a house they would go with me. My fiance has bad credit and makes about $45K/year. I want to apply by myself before we get married. With the $1500 and the $900 (maybe more) that they help with, we can pay about $2400/month.

Is there anyway to use her income but not her credit to qualify? Can I use the income from my "roommates" to qualify? If not, what are the chances I can qualify for this mortgage by myself?


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Valued Member
jessica04
Posts: 34
Registered: ‎07-02-2012

Re: Roommate "income"

I applied for a loan using only myself because my fiance also has some issues. Initially, I applied with both of us and they said no, he coudn't be anywhere on it. The LO said that I couldn't use his income for anything even though we split bills. I'm going USDA though, so it might be different in your situation. I live in IL so the house prices are WAY different here, but I would think you would have a hard time getting a loan for that much. I'm sure someone else on here will give you better insight. Good luck!


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Valued Contributor
tooleman694
Posts: 2,296
Registered: ‎08-25-2011

Re: Roommate "income"

I think your gonna have to work on your Girlfriends credit.. You could do it for sure then..

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webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Roommate "income"


Raiders1 wrote:

I'm trying to prepare myself for purchasing a house in the next few months. I've improved my credit scores, and they should improve just a little bit more before I apply. I want to buy a house for around $360K, I know some of you will say buy a cheaper house, but I live in southern california and houses are expensive, so this would be a average 3br 2bath house. I have about $50K for the down payment and make about $48K a year. I have no debt other than about $100 on my two credit cards ($1200 limit total). I know I can afford about $1500 a month by myself.

I currently live with my fiance and a roommate and they help with about $900 per month, if I get a house they would go with me. My fiance has bad credit and makes about $45K/year. I want to apply by myself before we get married. With the $1500 and the $900 (maybe more) that they help with, we can pay about $2400/month.

Is there anyway to use her income but not her credit to qualify? Can I use the income from my "roommates" to qualify? If not, what are the chances I can qualify for this mortgage by myself?


If you have been claiming the rental income on your taxes for the last 2 years, then by all means you can apply for the mortgage and list this income..   If you haven't disclosed it to the IRS, you cannot include it on your mortgage application unless you first file to amend your returns. Best to talk to your accountant about that!

 

 


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Sunshine85
Posts: 367
Registered: ‎01-14-2012

Re: Roommate "income"

[ Edited ]

Raiders1 wrote:

I'm trying to prepare myself for purchasing a house in the next few months. I've improved my credit scores, and they should improve just a little bit more before I apply. I want to buy a house for around $360K, I know some of you will say buy a cheaper house, but I live in southern california and houses are expensive, so this would be a average 3br 2bath house. I have about $50K for the down payment and make about $48K a year. I have no debt other than about $100 on my two credit cards ($1200 limit total). I know I can afford about $1500 a month by myself.

I currently live with my fiance and a roommate and they help with about $900 per month, if I get a house they would go with me. My fiance has bad credit and makes about $45K/year. I want to apply by myself before we get married. With the $1500 and the $900 (maybe more) that they help with, we can pay about $2400/month.

Is there anyway to use her income but not her credit to qualify? Can I use the income from my "roommates" to qualify? If not, what are the chances I can qualify for this mortgage by myself?


You won't be able to use your fiancé's income if she isn't on the loan. I also think you would be hard pressed to find a lender who will allow the rental income as well.

Your P&I (principle and interest on  $310k loan at 3.875 is $1,458/month. No idea what taxes and insurance run in CA, but calculate a monthly amount, add it to the P&I figure, add in any monthly debts that report on your CR, divide by your monthly *gross* income, and you'll get your DTI.That (along with other factors) will determine if you qualify. Some FHA lenders will go as high as 50% DTI, but overall, as long as you're well under 50%, and have at least a 640,  you should be able to find a bank who'll loan to you.

 

 

Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: Roommate "income"

You will only be able to use the income and debts of the persons on the loan.

 

I assume you have no rental income now because you are jointly PAYING rent, not collecting rent from them. If you want to buy the house yourself and have them pay rent to help pay the payment, you will have to qualify by yourself.

 

The monthly housing expense will be too much for your income. Also, don't forget about $5,000-7,000 per year in property taxes and home owners insurance depending on your local tax rate. You are also well under 20% down so you will have the additional expense of PMI.

 

Seriously, you are talking about spending more for a house than I did when I had 4 times your income. My income is now down to about equal to yours and it is almost impossible to pay the bills. You would have an easier time with the other two helping but what if those both went away?

 

I would work on her credit and expect that house prices will be lower by the time you are done depending on where you are in SoCal.

Valued Contributor
beb86
Posts: 1,117
Registered: ‎10-31-2011

Re: Roommate "income"

+1 to GregB this is kinda the situation that got people into trouble a few years back. Cal is also expected to raise state and local taxes at the end of the year
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webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Roommate "income"


GregB wrote:

You will only be able to use the income and debts of the persons on the loan.

 

I assume you have no rental income now because you are jointly PAYING rent, not collecting rent from them. If you want to buy the house yourself and have them pay rent to help pay the payment, you will have to qualify by yourself.

 

The monthly housing expense will be too much for your income. Also, don't forget about $5,000-7,000 per year in property taxes and home owners insurance depending on your local tax rate. You are also well under 20% down so you will have the additional expense of PMI.

 

Seriously, you are talking about spending more for a house than I did when I had 4 times your income. My income is now down to about equal to yours and it is almost impossible to pay the bills. You would have an easier time with the other two helping but what if those both went away?

 

I would work on her credit and expect that house prices will be lower by the time you are done depending on where you are in SoCal.


Ahh I am a landlord so I assumed there was a sublet going on instead of a joint tenant thing going on. Duh! Sorry :smileyhappy: I was trying to think of something to help out the OP

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Christlike
Posts: 24
Registered: ‎10-23-2012

Re: Roommate "income"

+1 to GregB


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